What is surplus lines premium tax? How does it differ from other premium tax?
Delaware law assesses a tax on each dollar of insurance premium written on risks located in the State, including premium written with non-admitted companies. According to Del. C., § 1917, surplus lines brokers are required to remit a tax on business transacted by them with unauthorized companies at the same rate as applies to premiums for like kinds of insurance written by authorized insurers under Title 18. What makes the tax on SL premium unique is that the tax is paid directly by the insured, rather than the insurer, as would be the case with admitted business. The surplus lines broker collects the tax as part of the premium and remits the tax to the Department on behalf of the insured. It is the SL broker’s responsibility to remit that premium tax to the Department in an accurate and timely manner.